Sept. 11 (Bloomberg) -- U.S. Senate Banking Committee members urged Fannie Mae and Freddie Mac, the mortgage companies placed under federal control this week, to freeze foreclosures on loans in their portfolios for at least 90 days.

``This action would provide immediate relief to many homeowners'' and let the companies ``turn these non-performing loans into performing assets to minimize losses,'' Senators Charles Schumer, Robert Menendez and other panel Democrats said today in a letter to the companies and the Federal Housing Finance Agency, which is overseeing them under the government conservatorship. The companies also should ease their policies on modifying mortgages, the senators wrote.

Lawmakers and bank regulators, including Federal Reserve Chairman Ben S. Bernanke, have pressed mortgage companies to help keep borrowers in their homes and out of foreclosure by reducing balances and changing loan terms.

Treasury Secretary Henry Paulson and FHFA Director James Lockhart on Sept. 7 announced the federal takeover of Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac, replacing their chief executive officers and eliminating dividends. The move came after the companies' combined $14.9 billion in net losses over four quarters threatened to further disrupt the housing market.

Fannie and Freddie can foreclose on loans they either own or guarantee, which is nearly half of the $12 trillion U.S. residential mortgage market. While they can direct servicers to stop foreclosure proceedings, other stakeholders, including private mortgage insurers, have some say in the process.

``Schumer really has to start thinking about what's in the best interest of the majority of taxpayers and I'm not sure that freezing foreclosures is in the best interest of the majority of taxpayers,'' said Joshua Rosner, an analyst with independent research firm Graham Fisher & Co. in New York. ``It would just prolong the agony.''

Spokesmen Brian Faith of Fannie Mae and Douglas Duvall of Freddie Mac declined to comment on the letter. FHFA spokeswoman Stefanie Mullin said the agency received the letter and is ``reviewing these issues.''

Besides Schumer of New York and Menendez of New Jersey, Senate Democrats Sherrod Brown of Ohio and Robert Casey of Pennsylvania also signed the letter.

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: September 11, 2008 16:54 EDT